Speaking at the Institute of International Bankers Annual Conference in DC, Superintendent Harris discussed the following:

•      CHARACTER AND FITNESS FOR BANKING EXECS: Superintendent Harris responded to “the buzz” about this recent DFS guidance, saying it should be unsurprising that regulated banks would want to screen out personnel in sensitive positions with criminal records, dire financial problems, or obvious conflicts of interests, calling this guidance “table stakes” and indicating the Department will begin reviewing this information regularly in the examination process.

•      ARTIFICIAL INTELLIGENCE: Superintendent Harris suggested that the DFS guidance on the use of artificial intelligence currently proposed for regulated insurance firms, also carried the broad outlines for future AI guidance that would be issued for regulated banking entities, including requiring strong governance around the use of AI and the avoidance of improper discrimination or disparate impacts.

•      CRYPTO REGULATION: Superintendent Harris stated DFS has a robust supervision team in place for cryptocurrency entities, and that New York has a “very high bar” to get a cryptocurrency license or charter. She also said DFS was very involved in the legislative process around federal stablecoin legislation and was working to ensure that any new law “maintained a space for state regulation.”

•      TIGHTENED SUPERVISION: In response to the bank failures from last year, Superintendent Harris stated that DFS had reformed its supervision process to implement new escalation protocols within the agency, and also indicated DFS would be more “aggressive” in considering a supervisory or enforcement response where banking institutions were taking “a long time” to remediate deficiencies identified in the examination process.

•      CYBERSECURITY: Superintendent Harris indicated that more than 3,000 companies had received training from DFS on the amended cybersecurity regulation, Part 500.

•      CLIMATE:  Superintendent Harris indicated that climate-related guidance issued by DFS was focused around safety and soundness and operational resiliency and had been restrained in its approach so as to ensure it was followed.